Former product manager at OpenSea convicted of insider trading

Former product manager of OpenSea, Nate Chastain, utilized insider information of NFTs to illegally profit over $50,000. In the early hours of the 4th, he was convicted of charges related to fraud and money laundering.

Former OpenSea Employee Accused of Insider Trading Convicted

Former product head of the global cryptocurrency collectibles and NFT secondary market OpenSea, Nate Chastain, was exposed on social media in 2021 for allegedly using his business advantage - being able to know which NFTs would be displayed on the OpenSea homepage. He would purchase them at a low price before they were listed, promote them, and then sell them at a higher price on the platform, making over $50,000 in profits. Chastain even concealed his trading activities by using an anonymous wallet.

(Source: Twitter)

According to a report by Coindesk Coindesk, Nate Chastain was convicted of money laundering and wire fraud in a New York federal court on Wednesday. The prosecutor filed the charges against Chastain in June 2022, stating that this case was the first insider trading case involving cryptocurrency assets in history.

"NFTs may be new, but this criminal scheme is not - it is fraud, plain and simple."

The prosecutor further stated, "This indictment demonstrates that the law still applies to insider trading - whether it occurs in the stock market or on the blockchain."

No Regulations on Cryptocurrency Insider Trading, Neither by Law nor OpenSea Policy

Until now, almost all cryptocurrency assets on the blockchain are not protected by the law. Insider trading of NFTs was not fully defined as illegal at the time until the judgment of this case, indicating that engaging in illicit activities through any means will result in conviction.

However, Chastain denies the verdict. His lawyer argued that during his tenure, OpenSea did not explicitly treat "which NFTs would be displayed on its homepage" as confidential information and did not have clear regulations prohibiting him from using or sharing this information.

OpenSea has issued an official announcement (original announcement has been deleted) after this incident, stating that they will establish more detailed policies on insider trading for internal employees.